Exploiting cheap third-world labor

It’s an old, old story: the customers of a company renowned for decent treatment of its workers in its prosperous home country are shocked to learn of its ruthless exploitation of workers in a less-prosperous country where the laws make it harder for workers to defend themselves.

All that’s new is that the first-world country is Sweden and the third-world country is rural Virginia.

I suppose someone will have to tell the soft-hearted Swedes that trade is always mutually beneficial, and that the workers in Danville are better off being exploited by Ikea than not being exploited by Ikea, since their other options are even worse. The real solution, obviously, is to get rid of the plutocratic governing structures that lead to lousy educational systems and to laws that impede the internationally recognized human right to organize and bargain collectively

Comments

  1. Ebenezer Scrooge says

    Two notes, one policy and one personal:

    On the policy end, I despise plutocracy, but don’t see what it has to do with lousy educational systems. Plutocrats generally like a well-educated workforce at least up to the trade school level, although they hate labor unions. The war against education is largely driven by the cultural wing of the Republican Party, not the plutocratic wing.

    On the personal end, I have given up on Buy America, and replaced it with Buy Union. I’ll gladly buy a Subaru Forester (made in Japan), but will no longer buy a Honda Odyssey (made by Confederate labor in Alabama.) Which is a shame, because the Odyssey is a pretty nice car, if you need a minivan. But so’s the Ford Flex, made by Union labor. (Yes, Confederate is the antonym for Union, in both senses of the latter word.)

  2. koreyel says

    Aye. The South will rise again…
    On the backs of cheap labor.

    Now as for the Southwest
    I’m not so sure:

    “The educational system in the United States and in Arizona in particular is not particularly attractive,” Craig Barrett told the Arizona Commerce Authority. The situation is so poor, he said, that if Intel were looking for a site to build an entirely new operation, as opposed to expanding its $10 billion Arizona presence, Arizona would not even be on the list of Top 10 choices.
    He was not alone in his comments. “The education system here is very weak,” said Doug Pruitt, chief executive of Sundt Construction. And Judy Wood, who runs Contact One, a small call center, said even her firm, which does not need college graduates, is having trouble finding Arizona high school graduates who can properly compose a sentence.

    America, ever onwards and upwards.
    Winning the future…
    And striding strongly along the Path to Prosperity…

  3. says

    (Kleiman): “…trade is always mutually beneficial, and … workers in Danville are better off being exploited…
    “Exploited” means “used” or “employed”. “I have no use for that guy” expresses disdain. You are either exploited, unemployed, or self-employed.
    (Kleiman): “…by Ikea than not being exploited by Ikea, since their other options are even worse.
    We agree. As Milton Friedman would say: “I’m on your side, but you’re not”.
    (Kleiman): “The real solution…
    To what?
    (Kleiman): “…obviously, is to get rid of the plutocratic governing structures that lead to lousy educational systems…
    I believe this. I will believe that Professor Kleiman believes his own words when he supports repeal of policies which restrict parents’ options for the use of the taxpayers’ K-12 education subsidy to schools operated by dues-paying members of the NEA/AFT/AFSCME cartel. The most effective accountability mechanism that humans have yet devised is a policy which gives to unhappy customers the power to take their business elsewhere. In the education industry this includes tuition vouchers, charter schools, tuition tax credits, subsidized homeschooling, and Parent Performance Contracting.
    (Kleiman): “…and to laws that impede the internationally recognized human right to organize and bargain collectively.
    “Internationally recognized”, huh? Depends on what you mean, I suppose. Consider Federal employees in the US. Consider New Zealand, where labor law reforms instituted under Roger Douglas require employers to negotiate with individual employees if the employee opts out of any collective agreement. Freedom of association means the right of groups of workers to ask for a uniform contract. Freedom of association also means the right of individual workers to opt out of the collective agreement. and negotiate one-on-one with their employers. It also means the right of employers to determine for their own business with whom they will negotiate.

  4. SamChevre says

    I suppose someone will have to tell the soft-hearted Swedes that trade is always mutually beneficial, and that the workers in Danville are better off being exploited by Ikea than not being exploited by Ikea, since their other options are even worse.

    I actually suspect this to be true. (I lived within an hour’s drive of Danville until last year, and my brother-in-law still lives near there. Danville is as poor a city as I’ve seen outside Appalachia.)

  5. SamChevre says

    Correction: Danville is as poor a city as I’ve seen in the US outside Appalachia; central America is much much poorer.

  6. Ebenezer Scrooge says

    Malcolm sez: “Freedom of association also means the right of individual workers to opt out of the collective agreement and negotiate one-on-one with their employers.”

    Does this imply that freedom of association also means the right of individual stockholders to opt out of the corporate form and negotiate one-on-one with their suppliers and customers?

    [Crickets?]

  7. LincolnKennedy says

    ^Or to approve all actions of the CEO and sundry corporate officers without the intermediary of a Board of Directors?

  8. Mark Kleiman says

    Malcolm clearly longs for the day when seven-year-olds toiled 84 hours a week in mines and mills. Clearly, having their minds and bodies shattered was beneficial to them; otherwise, why would they have taken the jobs?

  9. says

    (Malcolm): “Freedom of association also means the right of individual workers to opt out of the collective agreement and negotiate one-on-one with their employers.
    (Scrooge): “Does this imply that freedom of association also means the right of individual stockholders to opt out of the corporate form and negotiate one-on-one with their suppliers and customers?“.
    Sure. You sell your shares and start your own business.
    The strange feature of a “right” to colective bargaining is implicit access to the State’s tools of violence to use against other workers, to compel their participation in the collective.

  10. koreyel says

    Malcolm clearly longs for the day when seven-year-olds toiled 84 hours a week in mines and mills.

    Well in defense of Malcolm…
    It does seem self-evident that those seven-year-olds can nail IKEA furniture together for cheaper than $8/hour. And I imagine their lithe bodies and small statures are ideally suited for many of these tight assemblies. And given the kvetching of these modern Virginians (“It’s the most strict place I have ever worked,” said Janis Wilborne, 63, who worked at the plant for two years and quit last year. ), I suspect the children wouldn’t carp nearly as much. Nor would the little imps try to unionize.

    So really, I think Malcolm has the more serious position here…

  11. Ebenezer Scrooge says

    Malcolm,
    Gotcha. The shareholders can sell their shares and start their own business, but the workers can’t quit the firm, sell their tools, and start their own business. Your logic is remorseless. Or maybe workers aren’t allowed to start their own business or something.

    Sheesh, somebody–maybe Brett Bellmore–help Malcolm out. Other libertarians have dealt with the very difficult problem (to a libertarian) of the right of association. This right–like all economic rights–draws on the state’s monopoly of legitimate violence. That’s in part why some libertarians reject corporate charters–they can’t distinguish between shareholders and union members, like logical consistency, and get uncomfortable when the enforcement power of the state extends to governance structures. Governance, pretty much by definition, imposes the will of the collective over that of individuals. But if the enforcement power of the state does not extend to governance structures, why should it extend to any voluntary agreement among individuals? Whoops, there goes freedom of contract!

    I would advise that Malcolm read Dicey, who thought himself a utilitarian but reads like a smart libertarian. To him, trade unions (and large firms) were very difficult problems. There may be other better sources on this.

  12. Brett Bellmore says

    “The shareholders can sell their shares and start their own business, but the workers can’t quit the firm, sell their tools, and start their own business.”

    Sure, I’ll help: I’ll help by asking where you got that bit. Of course the workers can quit the firm, sell their tools, and start their own business. They can’t sell the firm’s tools, of course, but I can’t sell my neighbor’s lawnmower, either.

    “But if the enforcement power of the state does not extend to governance structures, why should it extend to any voluntary agreement among individuals?”

    I’m just fine with unions where they ARE voluntary. It’s just that they mostly aren’t.

    And, yeah, I have trouble with large firms. The whole idea of limited liability is seriously questionable.

  13. says

    Brett: the workers also can’t sell the expertise they’ve acquired during the time they worked for the company. When we finally get the technology for detailed brainwiping, employment contracts will be so much simpler.

  14. Ebenezer Scrooge says

    Brett,
    Thanks for the help. You are a pleasure to disagree with.

    I think you are eliding “voluntariness” with “governance.” Consider a homeowners’ association. Everybody agrees that it is voluntary, in the sense the people have a choice whether to join it. But once you’ve joined it, you’re in. Exit is possible, but it is often expensive. There is a lot of governance in these associations, and people are often forced to do senseless things at the behest of a majority (or dedicated controlling minority) that are not in their interests.

    In my view of libertarianism (IANALibertarian, btw), there is a real tension here. Peoples’ economic rights are governed by other people in a maximalist style, with the coercive arm of the state in reserve. You can dissolve it by pointing to some kind of consent, although this consent can start to resemble Rosseau’s social contract once you consider inheritance and the like. Heck, you can justify closed union shops on the same kind of consent, assuming that the unions and corporate employers at one time agreed to something.

    If you want another example, consider the Amish practice of shunning. Amish don’t live in big cities, so shunning really infringes on a person’s freedom of action. But if you don’t allow the Amish to shun, what does religious freedom mean?

    Freedom of association is not simple for anybody. But I think it is particularly difficult for libertarians.

  15. says

    (Kleiman): “Malcolm clearly longs for the day when seven-year-olds toiled 84 hours a week in mines and mills. Clearly, having their minds and bodies shattered was beneficial to them; otherwise, why would they have taken the jobs?
    I’ll take Professor Kleiman’s pretense to telepathy (“Malcolm clearly longs…”) as a concession. Otherwise he’d deal with what I actually wrote: “In the education industry this includes tuition vouchers, charter schools, tuition tax credits, subsidized homeschooling, and <a href="http://harriettubmanagenda.blogspot.com/2005/12/proposal.html"Parent Performance Contracting.” Why suppose that a modification to the legal environment within which the education industry operates, which shifts power from bureaucrats to parents, will reduce the resources devoted to children’s welfare?
    Hayek, The Constitution of Liberty, p. 284

    The path is still blocked by the most fatuous of all fashionable arguments, namely, that “we cannot turn the clock back.” One cannot help wondering whether those who habitually use this cliche are aware that it expresses the fatalistic belief that we cannot learn from our mistakes, the most abject admission that we are incapable of using our intelligence.

  16. says

    (Paul): “the workers also can’t sell the expertise they’ve acquired during the time they worked for the company.
    Workers can sell expertise that thay’ve acquired on the job. That’s the point of my suggestion that we redefine “public education” to include subsidized on-the-job training.
    I remember the words of a chemist who was hired away from Goodyear (or was it BF Goodrich? Dunno) by a competitor. He’d been chief of research at Goodyear, and reporters asked him about the ethics of taking his knowledge of Goodyear’s processes with him. He responded: “Loyalty and ethics have their price. International Latex has paid that price.”

  17. Brett Bellmore says

    “Brett: the workers also can’t sell the expertise they’ve acquired during the time they worked for the company.”

    Depends on the contract they sign. Generally speaking engineers such as myself are not permitted to utilize proprietary technology they learned of with one employer at a subsequent job. Even if not contractually bound, it’s a matter of professional ethics. Simple job skills, OTOH, are quite a different matter, and non-compete clauses are the exception, not the rule, generally restricted to positions where such proprietary information is just about the entire job.

  18. Barry says

    Malcolm: “Workers can sell expertise that thay’ve acquired on the job. That’s the point of my suggestion that we redefine “public education” to include subsidized on-the-job training.”

    Ooh – government-subsidized jobs?

  19. says

    (Barry): “Ooh – government-subsidized jobs?
    You have a point?
    Parent Performance Contracting reduces the government’s tax footprint as a fraction of GDP, since the level of subsidy, per pupil, remains the same and some of the total K-12 school budget shifts to private-sector accounts. It also generates goods and services in those private-sector accounts. Plus, it rewards academic and offers options for mechanically or artistically inclined kids to whom the current system offers few incentives. If it’s an educational plus, the only losers are measurably unnecessary teachers and the out-of-classroom parasites who infest the US State-monopoly school system.

  20. says

    (Kleiman): “Malcolm clearly longs for the day when seven-year-olds toiled 84 hours a week in mines and mills. Clearly, having their minds and bodies shattered was beneficial to them; otherwise, why would they have taken the jobs?

    Children’s plight not Dickensian
    September 08, 2007 The Australian

    LONDON: The plight of child labourers in Victorian Britain is not usually considered to have been a happy one. Writers such as Charles Dickens painted a grim picture of the hardships suffered by young people in the mills, factories and workhouses of the Industrial Revolution. But an official report into the treatment of working children in the 1840s, made available online yesterday for the first time, suggests the situation was not so bad after all. The frank accounts emerged in interviews with dozens of youngsters conducted for the Children’s Employment Commission. The commission was set up by Lord Ashley in 1840 to support his campaign for reducing the working hours of women and children. Surprisingly, a number of the children interviewed did not complain about their lot — even though they were questioned away from their workplace and the scrutinising eyes of their employers.

    Sub-commissioner Frederick Roper noted in his 1841 investigation of pre-independence Dublin’s pin-making establishments: “Notwithstanding their evident poverty … there is in their countenances an appearance of good health and much cheerfulness.”

    A report on workers at a factory in Belfast found a 14-year-old boy who earned four shillings a week “would rather be doing something better … but does not dislike his current employment”.

    The report concluded: “I find all in this factory able to read, and nearly all to write. They are orderly, appear to be well-behaved, and to be very contented.”

    There’s a similar passage in Joel Spring’s __The American School__ (iirc, maybe it was David Tyack, __The One Best System__), in which Child Welfare workers sought underage factory employees and asked them why they weren’t in school, and they said they preferred work to lessons and liked to be able to help pay the family bills.

  21. darms says

    Can’t find a link as this is ‘old news’ but in several stories I’ve read much of the local management for this factory are US MBAs. I’d expect no less from those bastards. John Cole’s site has a good essay with a number of illuminating comments…

  22. says

    As to “internationally recognized human right to organize and bargain collectively”, There’s “Clarity in Chile”.

    Chile has squelched a constitutional amendment affording public employee unions collective bargaining rights and a “right” to strike. Even some of the lefties who dominate the senate didn’t want to touch it. Perhaps the thugs at work in Wisconsin have tarnished the supposed “right” to collective bargaining for public employees.

    In any event, Chile has dragged itself up from the third world to the first in the last three decades by promoting economic freedom and free trade. And Chile is holding on to the keys to its success: “On global economic freedom rankings, Chile stands near the top — in part because its public employees can’t run up debt or corrupt the political process. The existing constitution makes Chile a full right-to-work country and expressly prohibits government collective bargaining and public employee strikes.”

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  1. [...] “It’s an old, old story: the customers of a company renowned for decent treatment of its workers in its prosperous home country are shocked to learn of its ruthless exploitation of workers in a less-prosperous country where the laws make it harder for workers to defend themselves. All that’s new is that the first-world country is Sweden and the third-world country is rural Virginia.” Mark Kleiman. [...]